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New Zealand economic data has painted a pretty sorry picture in recent months. But bad news for the economy will eventually be good news for Kiwi mortgage borrowers when it comes to the future of interest rates.

Wholesale rates are one of the big drivers of bank mortgage rates — and in the last eight weeks or so, they’ve fallen about 0.7%. It’s a significant drop, which means they’re now back down to roughly where they were a year ago. So what does this mean for borrower interest rates?

It feels pretty clear we're at the top of the current interest rate cycle. But with one more Official Cash Rate announcement to come for the year, what are the expectations for interest rates come 2024?

The Reserve Bank is holding the OCR steady at 5.50%, and after rumblings from parts of the market that suggest we could be in for another hike, most economists are now predicting the OCR will remain at 5.50% through much of 2024. It’s not the news that Kiwi mortgage-holders were hoping for, but how can Kiwi benefit from higher interest rates?

Young buyers are back in the market after being encouraged by lower house prices, greater listings numbers, higher deposits after 2-3 years of holding back from buying, a view that interest rates have about peaked, and a strong labour market bringing rising wages and high job security. So have investors joined them, and is FOMO back?

Sticking to the path it laid out for us in July, the RBNZ has opted to hold the OCR steady at 5.50% - and they're saying it might be 2025 before rates start to come down again. But global uncertainties, deflationary forces in China and the upcoming election has everyone holding their breath.

There is an increasing number of signs pointing to a turnaround in the housing market, and quite possibly even gains in house prices and sales. However, the question remains: What factors are driving this shift to happen sooner than anticipated?

We’re only 0.25% off the Reserve Bank’s (RBNZ’s) forecasted peak OCR – so will Kiwis be hit by other OCR hike, or have interest rates in New Zealand already peaked for this economic cycle?

Investors largely remain concerned about interest rate levels and access to bank finance. So when will they return to the housing market, and what will be the catalyst?

Do we have any evidence in hand of the impact on the residential real estate market yet of the recent round of fixed mortgage rate increases undertaken by banks? Yes, we do.

My monthly survey has shown a decrease in the net proportion of these investors thinking about buying another property from 10% down to only 2%.

I saw a newspaper headline recently along the lines that house prices have now bottomed out because some banks have cut their two year fixed mortgage interest rates. But interest rates aren't the only factor causing house prices to go down.